Trends, Forecast and Solutions: Food and Beverage Nelson LaFayette, Senior Vice President of National Accounts, entegra Procurement Services Presented by:
FOOD & BEVERAGE TRENDS NELSON LAFAYETTE SENIOR VICE PRESIDENT ENTEGRA PROCUREMENT SERVICES
2009 2011
CPI Food vs. PPI Mfg Food Through April 2015 Year-to-Year % Change 15.0% Margin Erosion 10.0% 5.0% 0.0% -5.0% -10.0% Food Deflation CPI PPI
Food prices have declined so far in 2015 but higher trends are expected for the rest of the year Beef Historic high prices for beef products continue due to reduced inventories; gradual price relief should be expected starting in 2016 Pork Higher supplies have benefited prices but tighter managed inventories will help raise prices in upcoming months Dairy Production levels have been higher than anticipated and US exports lower than expected which are benefiting prices, higher price trends are expected as lower production levels are forecast the rest of 2015 Coffee Drought conditions have relaxed in Brazil; no dramatic changes are expected and prices should remain below last year levels Eggs Driven by reduction in supply due to Avian Flu, egg prices will be significantly higher; certain liquid eggs products are running out of stock throughout distribution
Avian Influenza is significantly impacting the Supply Chain. What is Avian Influenza? Since December 2014, the U.S. has been experiencing an unprecedented outbreak of highly pathogenic (contagious) Avian Influenza, or bird flu. This highly infectious disease has affected more than 38 million poultry including egg laying hens. Over 80% of these were dedicated to supplying the processed egg industry which includes liquid pasteurized eggs. Menus and recipes may need to be adjusted based on product shortages and/or product availability. Entegra is anticipating pricing increases in the egg and turkey categories due to the significant loss of farms. Category Average Invoice Price / Case Anticipated Invoice Future Price / Case Cage Free Shell Eggs $35.93 $52.89 Pasteurized Shell Eggs- Cage Free $44.74 $47.29 Pasteurized Shell Eggs $37.12 $43.05 Liquid Pasteurized Eggs $28.93 $33.29
Egg Product Alternatives Recent availability challenges with specific egg products may require recipe modification here are some suggested ways to reduce reliance on eggs: In Breadings: Replace eggs in the breading process with buttermilk or yogurt; buttermilk will create a lighter breading, while yogurt creates a thicker, heavier breading. In Baking/Finishing: Replace egg wash with whole milk to get seeds/topicals to adhere. Use applesauce or plain yogurt for brownies/bars Use buttermilk for sheet cakes (will inhibit rise) Use cornstarch slurry for cookies (will be crisp)
IN ENTREES (when used as a binding agent): Use cooked oatmeal, mashed potatoes, cooked rice in items like meatloaf, meatballs Use fresh bread crumbs softened with milk for meat mixtures IN DESSERT CUSTARDS: Replace with a convenience custard mix, or; Use a cornstarch slurry with sugar, milk, butter & vanilla
Menu descriptors & trends Menu descriptors and trends
1- PERCEPTION OF MENU DESCRIPTORS AND TASTE Makes food taste BETTER From Full serving scratch Real of fruit Fresh Premium Full serving of vegetables Homemade Source: 2015 Technomic Inc.
PERCEPTION OF MENU DESCRIPTORS AND TASTE Makes food taste WORSE Low Sodium Low fat Low Low calorie Low Cholesterol Sugar Low carbohydrate Gluten-free Source: 2015 Technomic Inc.
2- Variety and customization are expected What Would You Choose Between These Two Options? 2015 Technomic Inc. (decisions, decisions!) 12
Winning with Millennials Baby Boomers Customization Creating fun and unique experiences Driving cravings Strong value with friendly, attentive service Healthy options Source: 2015 Technomic Inc.
3- Smaller portions are a key trend Smaller-portion Items Are a Key Trend 2014 Technomic Inc. 14
2015 Technomic Inc. 4- Special offers and bundles
Consumers Will Increasingly Value Experience THE EXPERIENCE RESONATES when it makes us feel something 2014 Technomic Inc. c 16 16
1 2 3 4 The Consideration Set Top 10 Brands (overall rating) 6 7 8 9 5 10 Source: Consumer Brand Metrics, Technomic 2014 Technomic Inc. 17
Questions? Smaller-portion Items Are a Key Trend 2014 Technomic Inc. 18